Renzi makes peace with EU's Juncker as both condemn "blind" austerity

Italian Prime Minister Matteo Renzi and European Commission President Jean-Claude Juncker buried the hatchet on Friday, teaming up to condemn "foolish and blind" austerity policies following months of bickering between Rome and Brussels.

Renzi has emerged as a leading critic of the European Union's executive, accusing the commission of being too bureaucratic, too close to Germany, and too focused on policing austerity.

Speaking in Rome, Juncker defended the European Union's executive arm while aligning himself with Renzi's calls for growth and jobs.

"The commission I lead is not an ensemble of technocrats and bureaucrats, it is made up of politicians, including several former prime ministers," Juncker said. "It is not a commission that extols the virtues of a foolish and blind austerity."

"We should not lose sight of the absolute need for Europe to regain the path of more sustained and lasting growth: a Europe that accepts as a fait accompli such a high number of unemployed is not certainly the Europe I dream of," he added.

"Jean-Claude said today that austerity is stupid: I endorse and subscribe to this," Renzi said in a joint press conference, vowing to still work to reduce Italy's huge mountain of public debt, the EU's second highest in relative terms after Greece.

But both leaders dodged questions on whether Italy will be allowed to drift from EU deficit reduction targets this year and next, as was the case in 2015 thanks to "flexibility" provisions that give leeway to countries with a good reform record.

In a regular review of EU countries' economies, published in parallel to Juncker's Rome trip, the commission found that Italy was still suffering from "structural weaknesses" hampering its growth and resilience, including high public debt.

Renzi repeated that his country was no longer the EU's problem child thanks to his government's reforms, but the commission gave a mixed assessment, praising acts like an overhaul of the job market while criticizing tax giveaways.

"The cut to property taxes on first residences from 2016 is not consistent with repeated recommendations [from fellow EU governments] to shift taxation away from productive factors onto property and consumption," the commission noted.

Renzi and Juncker also found common ground on migration, the main topic of an EU-Turkey summit scheduled for March 7.

Without naming specific offenders, the commission chief blamed EU governments for resisting a plan to redistribute asylum seekers across the bloc, and accused many of them of fleeing from common sense solutions.

The Italian leader said the EU should also join forces to repatriate migrants who don't qualify for asylum, and repeated warnings to Central and Eastern European countries that are stonewalling EU burden-sharing requests.

"I hope that [Juncker] may be able to win the battle with some colleagues," Renzi said. "People can't ask for solidarity only when it comes to grabbing European funds, and forget it when it comes to helping with migrants," he added.

In the run-up to the talks, the Italian premier dismissed suggestions he had raised anti-EU rhetoric for vote-grabbing reasons, insisting he was driven by a sincere desire to reform the EU and bore no grudge against Brussels.

Juncker, who scolded Renzi in January for "vilifying and criticizing the commission on every street corner," said Friday that Rome and Brussels have similar views on many fronts, despite "partial disagreements" and occasional "maladroit" moves from both sides.

On Monday, Italy unveiled a blueprint for EU reforms, including calls to set up a eurozone unemployment benefits scheme. The paper took aim at Germany's large trade surplus, which the commission also criticized in its Friday economic reports.

Juncker, who also met President Sergio Mattarella and his still influential predecessor Giorgio Napolitano, praised the Italian document for "giving renewed courage to those who still believe in the need for Europe."

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